Funds sniff chances to go long in July-Sept

Better opportunities to take long positions in the July-September quarter of 2016 are expected as market conditions are set to improve, institutional investors said.

Fund analysts said demand for and supply of capital are well-balanced, so the slow pace of initial public offerings will stabilize capital flows. Thus, policy-driven sentiments may brighten in the July-December half of the year.

A research note from Haitong Securities said as supply-side reform deepens, cyclical sectors such as tourism, food and beverage and retail will see higher demand in the second half of the year. They will be supported by increased supplies as longer holidays, festivals and family gatherings mark the second half, which typically lifts stocks in these sectors.